Acquire Now

Get The Best Quote




Required documents

ABOUT Term Loan

Term loans are user specific. Every person takes term loan based on his set of requirements. There are two basic parameters in a term loan.

Interest rate:
The rate at which one avails the loan depends upon the lending bank norms as well as the financial strength. The interest rates depend upon bank to bank.

Duration of repayment:
The repayment of the loan has to be made based on the lending terms as agreed with the bank at the time of availing the loan.

The best use of a term loan is for construction; major capital improvements; large capital investments, such as machinery; working capital; purchases of existing businesses. Fortunately, the cost of such a loan is relatively inexpensive if the borrower can pass the financial litmus tests. Rates vary, making it worthwhile to shop.

Finmart understand these needs and has a strong track record of assisting owners by providing a broad array of loan programs, competitive pricing, competitive loan fees and excellent customer service

Banks look for 5 “C”s during decision making about term loans:

How the client has managed other loans (business and personal)? They also evaluate the client’s business experience.

Credit capacity:
The bank will conduct a full credit analysis, including a detailed review of financial statements and personal finances to assess the ability to repay.

This is the primary source of repayment. The bank expects this source to be larger than the amount borrowed.

The bank looks for those assets that can be quickly turned into cash if necessary that might work as an alternate repayment source like bonds, stocks, apartment buildings etc. "Banks like to lend to people who already have money." Most likely a personal guarantee is also required to be added.

Comfort/confidence with the business plan:
The banks make a detailed judgement on the accuracy of the revenue and expense projections along with the condition of the economy and the industry.

The degree of financial strength required to receive loan approval can vary tremendously between banks, depending on the level of risk the bank is willing to take on.


Any person who is above 18 and willing to get Term Loan is eligible.

Required Documents

The basic list of documents required for the term loan is as follows:

  1. PAN Card Xerox.
  2. Address Proof.
  3. Income Tax returns, computation & Balance sheet for last 3 years.
  4. Brief profile.
  5. Quotations for Term Loan.
  6. Detailed manufacturing process.
  7. Bank Statement last 12 months.



Loan taken from a bank to pay for a major investment in the business or for acquisition of long term assets for a specific amount having a pre decided repayment schedule is called a term loan. Term loans usually mature between one and ten years.
Term loan can be used for construction, major capital improvements and huge capital investments such as machinery, equipments, vehicles, etc.
  1. Payments are same every month, so budgeting of expenditure can be done.
  2. Cost of Term loan is lower than obtaining Equity Funds.
  3. It does not result into dilution of control in case of company having share capital
  4. Due to direct negotiation between the lender and the borrower, term loans can be raised in relatively shorter duration.
  5. Interest expenses carry tax benefits.
  1. The Finmart team identifies the project and studies its feasibility.
  2. On the basis of the analysis, Team Finmart made prepares documents as per bank required formats.
  3. Discussion with the bankers about the project is undertaken and site visits are arranged.
  4. After various levels of discussion with the bankers, the project gets finalized for sanctioning.
  5. The client gets the sanction of the limits as discussed.
  6. Lastly the disbursement of the loan amount is made by the bank.
  1. The Income tax returns should be timely filed with the Income tax department.
  2. Ensure that the acquisition cost of the asset acquired is proper and just because the amount of the Term loan taken depends a lot on the asset covered under the loan. Thus competitor analysis for supplier of machinery/equipments/vehicles etc.  is necessary.
  3. The genuineness of the suppliers of assets must be verified beforehand.
  4. The CIBIL report of the borrower should be healthy thereby reducing the chances of non-sanctioning of loan from the bank.
  5. Market study of the product manufactured from the acquired assets should be carried out to ensure timely repayments from the revenue earned of the loan amount borrowed.
  6. A feasibility study of the ancillary supply required for proper functioning of the asset and manufacturing of the product should be done to avoid shutdown of the project. Examples are availability of raw materials, labour, land etc.
Ask a Question